India offers to invest $11bn in Iran’s Farzad-B – and to take all the gas home

An Indian consortium headed up by ONGC Vicesh has said that it is willing to spend as much as $11bn to develop Iran’s Farzad-B giant natural gas field and the upstream infrastructure required to facilitate the export of the entire output back to the subcontinent provide that Tehran guarantees a “reasonable return” on the project, according to the MD of its overseas investment unit Narendra Kumar Verma. His comments, made in an interview with Bloomberg, come just days after the French oil major Total announced that it was ready to invest over $4bn in Phase 11 of the South Pars field, and is a further indication of Tehran’s attempts to attract foreign investment into the development of its energy sector in the wake of the lifting of sanctions last year. India is the world’s fourth-largest LNG buyer, and the deal would also tie in with the country’s efforts to meet growing demand for energy and its attempt to encourage the use of cleaner-burning fuels. A partial switch from coal and petroleum coke to cleaner fuels such as LNG is seen as essential if it is to meet its pledge of slashing emission by one third by 2030. The consortium, which also includes the Indian Oil Corporation and Oil India, has offered to invest as much as $6bn on the field – which has estimated reserves of almost 19 trillion cubic feet – and a further $5bn on the construction of a liquefied natural gas export facility if it can see a potential return of 18%, Verma said. He also predicted that Indian companies were willing to buy all the gas exported from the project. “We have given our best offer to them. Now, it is up to them to agree or not agree. We have told the Iranian authorities very clearly that some basic returns are necessary.”